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Debt consolidation loans can help you reduce your overall debt, give you some breathing room, or help you to pay your debt off more quickly. This kind of loan combines a number of smaller loans into one larger loan, helping to simplify payments or lower interest rates. There are many debt consolidation options, even if you have poor or limited credit. Shopping around loan providers will ensure you get the best rate and terms for your needs.
| Company | Best for | APR range | Minimum Credit Score | Loan amounts |
|---|---|---|---|---|
Low to no fees | 8.99% to 25.81% (with autopay) | Good to excellent | $5,000 to $100,000 | |
Secured loans | 8.99% to 35.99% | Excellent | $2,000 to $50,000 | |
Fair credit borrowers | 8.49% to 35.99% (with autopay) | Fair | $1,000 to $50,000 | |
Large loan amounts | 7.99% to 25.99% (with autopay) | Good | $5,000 to $100,000 | |
Bad credit borrowers | 6.40% to 35.99% | Bad | $1,000 to $50,000 | |
Short repayment terms | 9.95% to 35.95% | Fair | $2,000 to $35,000 | |
Good credit borrowers | 11.72% to 17.99% | Good | $5,000 to $40,000 | |
Fast funding | 7.99% to 24.99% | Good | $2,500 to $40,000 |
Our top recommendations
SoFi: Best for low to no fees
8.99% to 25.81% (includes 0.25% autopay discount)
SoFi
8.99% to 25.81% (includes 0.25% autopay discount)
SoFi
APR
8.99% to 25.81% (includes 0.25% autopay discount)
Loan amount
$5,000 to $100,000
Fees
No late fees, origination or application fees
Best for
8.99% to 25.81% (includes 0.25% autopay discount)
Pros:
- Ability to borrow a large amount.
- Loan proceeds available as soon as the same day.
- No late fees, prepayment penalties or origination fees.
Cons:
- Interest rates may not be as competitive.
- Higher minimum loan amount compared to other competitors.
In addition to some of the most competitive interest rates available, Sofi also doesn’t charge origination or late fees. Plus, the lender offers several other perks such as unemployment protection, which is useful if you end up losing your job, and access to free financial advice.
Best Egg: Best for secured loans
Unsecured and secured installment loans
Best Egg
Unsecured and secured installment loans
Best Egg
APR
8.99% - 35.99%
Loan amount
$2,000 - $35,000
Fees
Origination fee, 0.99% to 8.99%
Best for
Unsecured and secured installment loans
Pros:
- Can take out a secured loan.
- Loan proceeds as soon as the next day.
- Loan proceeds paid directly to creditors.
Cons:
- Charges an origination fee.
- Can't choose your own initial payment due date.
- Best rates requires a higher credit score.
Best Egg offers secured loans for those who want to improve their chances of getting approved for a consolidation loan. Since these loans are secured, they often have a more favorable rate than some of Best Egg's competitors. There are no late fees, and although there is a small origination fee it may be worth paying if you have fair to good credit and want to get a competitive rate.
Upgrade: Best for fair credit borrowers
Fair credit borrowers
Upgrade
Fair credit borrowers
Upgrade
APR
8.49% to 35.99%
Loan amount
$1,000 to $50,000
Fees
Origination fee, late fee
Best for
Fair credit borrowers
Pros:
- No prepayment penalties.
- Low minimum loan amount.
- Joint applications allowed.
Cons:
- Loans only available up to $50,000.
- Borrowers need to pay origination fee.
- APRs may be higher than competitors.
Upgrade offers those with lower credit the opportunity to take out a loan to consolidate their debt. Borrowers can apply with another applicant, choose from secured loan options, and qualify for various rate discounts. You can also pay your existing lenders directly if you take out a debt consolidation loan through Upgrade.
Lightstream: Best for large loan amounts
Good credit
LightStream
Good credit
LightStream
APR
7.49% - 25.49%
Loan amount
$5,000 - $100,000
Fees
None
Best for
Good credit
Pros:
- Discount on interest rate if opting into autopay.
- Lengthy repayment terms.
- No late, origination or application fees.
Cons:
- Can't get pre-qualified.
- Higher minimum loan amount.
- Unable to pay directly to creditors.
Lightstream offers high loan amounts for those wanting to consolidate significant levels of debt into one loan. Though Lightstream's rates aren’t the best on the market, if you have high levels of debt and a fair credit score you could save money and greatly simplify your payments by taking one of these loans.
Upstart: Best for bad credit borrowers
Bad credit
Upstart
Bad credit
Upstart
APR
6.4% - 35.99%
Loan amount
$1,000 - $50,000
Fees
0% to 8%
Best for
Bad credit
Pros:
- Can change payment due date.
- Ability to get prequalified.
- Borrowers with limited credit. history can apply.
Cons:
- No joint or cosigned loans.
- Limited repayment terms.
- Could be charged origination fee.
Upstart is one of the few lenders that accepts applications with limited credit history, as long as they're able to meet other requirements. These include a credit score of at least 300 and no major negative remarks on their credit history. Upstart also allows applicants to apply with a cosigner, which can improve your chances of being approved and help you start to improve your credit score. There are also no early prepayment penalties, and loan proceeds arrive as soon as one business day after signing your loan documents.
Avant: Best for short repayment terms
Low origination fee
Avant
Low origination fee
Avant
APR
9.95% - 35.99%
Loan amount
$2,000 - $35,000
Fees
Administration fee, 4.75%
Best for
Low origination fee
Pros:
- Fast funding.
- Lower income and credit requirements than other competitors.
Cons:
- No joint or co-signed loans.
- Not available nationwide.
With Avant, in addition to fast funding times, borrowers can take out a loan with a term as little as 12 months: great if you want to pay off your loan quickly and avoid interest fees. While you can’t apply with a cosigner, Avant has relatively low credit requirements, so even borrowers with low or limited credit may qualify.
Happy Money: Best for good credit borrowers
Happy Money
Happy Money
APR
Loan amount
Fees
Best for
Pros:
- Competitive APRs.
- Pays directly to creditors.
Cons:
- Borrowers must pay origination fee.
- No joint or co-signed loans.
Happy Money offers clearer eligibility requirements than other lenders, helpful if you're unsure whether your credit profile would meet the minimum requirements for a loan. Borrowers can also take out a loan for up to 60 months (for those wanting more time to pay their debt off) And there are no late fees or prepayment penalties. For those concerned about loan repayment, there is a hardship option if you lose your job or find yourself in a difficult financial situation.
Discover: Best for fast funding
Pros:
- No origination fee.
- Loan proceeds as soon as next business day.
- Can prequalify for loan.
Cons:
- No joint or co-signed loans.
- Late fees may be charged.
Discover offers several good options for those who have good to excellent credit, since the lender offers no origination fees and competitive interest rates. Borrowers also get fast funding after signing their loan documents, and can use Discover's mobile app to manage and view their loan. Those who rate customer service high on their list of priorities may also like that Discover offers extended business hours seven days a week and a team of loan specialists based in the US.
How we chose the best providers of debt consolidation loans
We researched dozens of personal loan companies for this article, including banks, credit unions and online lenders. We focused on features such as interest rates, fees, repayment terms, customer support, and the application process. The best providers are those that offer a good balance of repayment terms, low fees, and competitive interest rates. For some of the categories above, we also considered lenders who accept applications from borrowers with low or limited credit scores.
Choosing the best debt consolidation loan provider
To find the best consolidation loan for you, first assess your credit and financial situation. For instance, do you have good credit? How much are you looking to borrow? Since lenders have different minimum requirements, this can help you limit your search to those lenders for whom you have a high chance of approval.
As you’re shopping around, think about other features that are important to you in a loan or lender and which take priority. That way, if you can’t find a loan that meets all your requirements, you can still find one that works for you.
How do debt consolidation loans work?
Debt consolidation loans are a type of personal loan in which you use a large loan to pay off several smaller, existing debts. You’re then left with one loan, on which you’ll make monthly repayments. Some lenders will pay off your other lenders directly; with others, you can use the loan proceeds to do it yourself.
Pros and cons of debt consolidation loans
Pros:
- Help simplify loan payments.
- Can help to extend loan terms. This gives you longer to pay off your debt, and a little financial breathing room.
- You may pay less in interest overall, if your consolidation loan has a lower interest rate than the loans it replaces.
Cons:
- As with any loan, the lowest rates are typically reserved for those with excellent credit scores.
- Longer loan terms could result in more interest paid over the life of the loan.
- There may be fees associated with taking out a debt consolidation loan.
Frequently asked questions (FAQs)
Do consolidation loans hurt your credit score?
Consolidation loans can affect your credit score temporarily, because when you submit a loan application the lender will do a hard credit inquiry. If you make loan repayments on time, this effect will disappear. However, it will hurt your credit score if you make late payments, miss payments, or your loan goes into collection.
What is the safest place to get a personal loan?
The safest places to get personal loans are accredited financial institutions such as banks, credit unions, and (some) online lenders. Make sure to check the reputation of the lender before signing up for any loan.
Can personal loans hurt your credit score?
Personal loans can hurt your credit score if you apply for too many loans, because every application will have a small, temporary affect on your credit score. More significant damage can occur if you engage in negative credit behavior such as making late payments, missing payments, or defaulting on your loan.
AP Buyline’s content is created independently of The Associated Press newsroom. We might earn commissions from links in this content. Learn more about our policies and terms here.
